Dominican Republic alleged drug kingpin Caesar Peralta and his close ties to federal government officials

By Christine Duhaime | August 25th, 2019

On August 20, the US Office of Foreign Assets Control (“OFAC“) designated Caesar Emilio Peralta, a national from the Dominican Republic and the criminal organization he is said to control, as significant narcotics traffickers and a drug kingpin under the Foreign Narcotics Kingpin Designation Act.

Caesar Emilio Peralta (Source: Instagram)

Alleged money launderer and trafficker

Peralta is known as “Caesar the Abuser” (el abusador) in the Dominican Republic. Peralta’s criminal organization is alleged to traffic cocaine and opioids for Mexican cartels to foreign countries, including into the US and Europe, and to use front companies and nightclubs to launder money and traffic women from Colombia and Venezuela.

Peralta has a criminal record for involvement in narcotics trafficking. He has an Instagram account, @cesar_emilio_peralta30 (now private).

Franco family of criminal PEPs

The Dominican Republic has issued a warrant for the arrest of Peralta who remains at large.

Marisol Franco

Caesar the Abuser’s wife is Marisol Mercedes Franco.

This newspaper spoke to a source who alleges that Peralta was tipped off by the federal government and left the Dominican Republic a week before he was supposed to be arrested. That makes sense because his sister-in-law is the federal politician Berlinesa Franco – she is the sister of his spouse, Marisol Franco. Berlinesa Franco is close to the president of the country.

Berlinesa Franco and Marisol Franco are the daughters of another major drug trafficking fugitive named Francisco Franco, a/k/a Franklin Franco, a/k/a Frankie Franco.

Francisco Franco (Source: US Marshals)

Francisco Franco escaped from prison in the US and has been wanted by the US Marshal Service since 1987, on an outstanding warrant from the SDNY.

A number of Dominican news articles, including this one, say that Francisco Franco was connected at the highest levels and protected by the Dominican Republic government for decades and that the government refused to take steps to extradite him to the US. Berlinesa Franco is able to enter the United States frequently, according to her Instagram account, and doesn’t appear to have ever been questioned about her fugitive father. The Instagram account of Berlinesa Franco (recently made private), documents her many trips, mostly to the United States, and a recent luxurious lifestyle.

Moya de la Cruz

According to media reports in the Dominican Republic, Marisol Franco used to be married to Sergio Moya de la Cruz.

Sergio Moya de la Cruz was charged in the Dominican Republic in 1998 with money laundering. He later got into the gambling business and owned a number of what are called “bancas” – little huts where one can place bets and wagers. He is now a politician in the Dominican Republic, even though two global drug traffickers comprise his close family – Francisco Franco was his father-in-law.

Sergio Moya follows his fugitive relative, Francisco Franco, on Instagram at this account, (@franklinfranco23) (recently made private).

Winston Rizik (Source: US Marshals)

It gets even more interesting. Sergio Moya’s partner in the bancas gambling business was Winston Rizik Rodriguez, (pictured above) another major drug trafficker who coincidentally is also wanted by the US Marshals. How Moya de la Cruz and Rizik were able to be registered by the Dominican federal government to operate gambling enterprises in the Dominican Republic is a mystery. Rizik and Moya de la Cruz had a business dispute and Rizik landed in jail and is incarcerated in the Dominican Republic, serving a ten year sentence for money laundering and drug trafficking activities.

Rizik and Francisco Franco lived un-incarcerated for decades in the Dominican Republic and appear to have accumulated considerable wealth.

Francisco Franco today with his exotic car collection (Source: Instagram account of Francisco Franco)

A good summary of Peralta and his connections to the Franco family and Sergio Moya de la Cruz is described on the news piece, below.

Detallando el Caso de Caesar el Abusador (Source: YouTube)

Dominican Republic & drugs

The Dominican Republic is known as a premier transit country for drugs from Colombia and Mexico en route to Canada, the US and Europe because of its non-existent financial crime controls and its pervasive government corruption. It is also known as a major human trafficking country where Venezuelian children and teenagers trafficked there, are forced into sex slavery for tourists from the US, Canada and Europe.

More recently, the DEA has reported that foreign nationals from the Dominican Republic living in New York City, control distribution of the fentanyl trade for the Sinaloa Cartel.

Update: Peralta was located in Colombia and arrested in early December 2019.

In audio recordings, Peralta alleges he bribed the president of the Dominican Republic and several other government officials for years, essentially ensuring that the president got elected. Prior to his arrest, he alleges that he offered to pay them more money not to be turned in. The president of the Dominican Republic has admitted that Peralta funded his campaign but alleges that he did not know that he was an alleged narco trafficker and money launderer. Peralta says that the president had no house before Peralta began paying him protection money and helped his rise to power.

Major drug bust involving Vancouver area is right out of a former DEA agent’s book about the capture of drug lord, El Chapo

By Christine Duhaime | August 24th, 2019

A major drug bust in Washington State by Homeland Security Investigations and by the RCMP in British Columbia, played out exactly how former DEA agent, Andrew Hogan, described some drugs were being trafficked between British Columbia and Washington State by the Sinaloa cartel.

In his book, “Hunting El Chapo“, Hogan describes how the Sinaloa used helicopters to move drugs from Washington to British Columbia and according to an affidavit filed in connection with a bust that occurred in June of this year, that is still the way some drugs are illegally moved across the border.

This story in the Vancouver Sun describes how in June, HSI agents seized 188 kilograms of methamphetamine from two suspects in Washington who were meeting a helicopter originating from the Vancouver area to deliver the methamphetamine. The helicopter was supposed to touch down in a heavily forested area and return to Canada with the drugs. The pilot circled above the pick-up spot but did not land as planned and instead took off back to Canada, where an RCMP plane tracked it.

It eventually landed on a property in Chilliwack where RCMP located 72 long guns, 35 handguns, ammunition, cellphone jammers, U.S. government helicopter decals, drones and currency from Canada, the US and Mexico. Two men on the Canadian side were also arrested.

FinCEN releases red flags for fentanyl and Bitcoin

By Christine Duhaime | August 24th, 2019

FinCEN has released an advisory for banks to become aware of, and assess the purchase and trafficking of fentanyl online for financial crime compliance. Fentanyl is imported in bulk from Mexican cartels and follows the same typology as typical TCOs and money laundering activities. It is also imported from China via online sales on the darknet using Bitcoin, Ether or Monero and the red flags in respect thereof are different.

With respect to fentanyl ordered online, the way it works is as follows:

  • A person accesses through TOR a darknet marketplace that allows vendors to sell fentanyl, or the person locates an online vendor in the normal way;
  • The person opens an account, makes the purchase and pays in Bitcoin;
  • The darknet marketplace uses its pooled Bitcoin wallet to broker the deal and so the person paying is paying to the marketplace in escrow, not the vendor;
  • The darknet marketplace extracts commission in Bitcoin for brokering sales of illegal drugs and they send the remaining Bitcoin to the drug dealer; and
  • The drug dealer uses the postal service or a courier to ship the fentanyl to the buyer.

Knowing that that’s the process, things for banks to be aware of to gate-keep the financial system are as follows:

  • With respect to digital currency exchanges, undertake due diligence to ensure that you are aware of any in your ecosystem (including your clients who bank exchanges) that have darknet capabilities.
  • With respect to digital currency exchanges, undertake due diligence to be comfortable that the terms of use are adequate.
  • With respect to digital currency exchanges, undertake due diligence to ensure that the entity has an incorporation jurisdiction that is disclosed publicly.
  • With respect to digital currency exchanges, undertake due diligence to ensure the officers are identified publicly.

The FinCEN advisory mentions AlphaBay, the Canadian darknet marketplace that was the largest in the world which operated with bank accounts processing billions of dollars in Bitcoin and money solely for criminal activities, including the sale of fentanyl which resulted in the untimely death of young adults around the world. You can read about AlphaBay here.

Red flags also include transactions involving countries that are known for lax financial crime compliance.

You can read more from FinCEN here.

American Bitcoin exchange owner on trial for murdering his girlfriend in the Philippines

By Christine Duhaime | August 3rd, 2019

While an inordinate number of Bitcoin exchange executives are facing increased violence, and even death (see here and here), one exchange CEO is on trial in the Philippines for the opposite – namely, allegedly killing his girlfriend.

Troy Woody Jr., apparently the CEO of an exchange in the US called Luxr LLC, was arrested in Manila with another person named Mir Islam, and charged with the murder of 23-year-old Tomi Masters. Mir Islam allegedly has a criminal record from hacking.

On December 23, 2018, Ms. Masters was found in a large wooden box in a Philippines river, naked, bound with duct tape and with a plastic bag over her head. Originally from Indiana, she was in the Philippines with Woody.

Woody and Islam allegedly put Ms. Masters’ body in a large box in a taxi and dumped it into a river from a bridge. The taxi driver went to the police after the incident because he was suspicious.

Woody has allegedly admitted dumping a box in a river in the Philippines but said the box is not his but he has changed his story, allegedly, as to his role in her death. Both suspects claim to know nothing about her death and both say they just randomly agreed to hire a taxi, loaded a heavy box in the taxi that was chilling in Woody’s apartment, and agreed to pay the taxi driver to take them to a bridge over a river and during the ride, threw a heavy box from a bridge into a river for no reason, not knowing what was in it.

According to this article, two days before her death, Ms. Masters removed all references to Woody on social media and allegedly booked a flight to return to the US without him.

A month before his girlfriend was found dead, Woody started what appears to be a Twitter fight against his friend, well-known hacker CosmoTheGod formerly of UG Nazi (see here and here) and allegedly the CEO of a company called Path Network, whom Woody accused of spending customers’ money to fund a lavish lifestyle. Both Islam and Woody were allegedly also part of UG Nazi. There is a Vancouver connection – Path Network announced work that it did for the TOR accessible, Vancouver-based ICO digital currency exchange called CoinPayments.

Woody had his own lavish lifestyle promoted on social media, making purchases of diamonds, watches and other luxury items bought with proceeds of Bitcoin transactions. His Instagram account is here.

A good background story is here. Woody is incarcerated at Bicutan in the Philippines, a remand prison for foreigners that is well-known for its inhumane prison conditions.

Woody claims that he had significant sums in Bitcoin and that the FBI seized it.

Blockchain companies in Vancouver, Canada caught up in securities fraud investigation

By Christine Duhaime | July 29th, 2019

Bridgemark and Blockchain

Two Canadian Blockchain companies based in Vancouver, BLOK Technologies Inc. (“Blok“) and Cryptobloc Technologies Corp. (“Cryptobloc“) have been caught up as part of the so-called Bridgemark scandal affecting Vancouver’s capital markets.

The Bridgemark situation started in November 2018, when the Executive Director of the BC Securities Commission announced that he had issued an order against numerous companies and persons associated with Bridgemark Financial Corp. (“Bridgemark“) over allegations that one or more of the named companies and persons were allegedly involved in fake consulting agreement schemes whereby persons or companies were allegedly hired as consultants and paid lump sum fees in advance but provided no services.

According to the BCSC, Blok and Cryptobloc each sold shares via private placement to Bridgemark for proceeds of $4.5 million each.

Two other little cannabis companies did the same for total proceeds raised from Bridgemark of $17,929,500.

But then, allegedly Blok, Cryptobloc and the two other companies paid back Bridgemark $15,331,000 for what appears to be alleged consulting fees, thus between the 4 issuers, they appear to have been left with a little over $2 million from alleged private placements of $17 million. In other words, after seeking and obtaining $17 million from the public to invest in the companies, those companies turned around and gave, or contracted to give, most of it away to consultants without informing shareholders or obtaining their consent.

Such an arrangement, if it existed, is material and contracts for such arrangements, if they existed, are material contracts. According to the public disclosure documents filed on Sedar, no shareholders of the issuers were informed in filings of the pay-back of funds-raised-back-to-the-one-placee, if such did indeed occur.

The BCSC alleges that the so-called Bridgemark scheme facilitated the illegal distribution of securities and was abusive to the capital markets.

According to the disclosure record of the public filings of the two Blockchain companies, there is no disclosure of material contracts between them and Bridgemark, and no disclosure of the fact that over 80% of funds raised by private placement were directed back to the coffers of the one placee, according to the BCSC.

Because none of these two issuers filed the required material contracts on Sedar, as required, no shareholder can make an informed decision and ascertain whether the services provided by the consultants were warranted, were non-arms length and added value to the issuers involved.

Further, if all the issuers have in the area of emerging technology is funds to develop such technology for shareholders, disposing of substantially all of it to alleged consultants without notice to, and consent of the shareholders, appears to be a disposal of substantially all of the undertaking of the corporate entities, as that concept is known in English corporate law.

In the Spring of 2019, the BCSC issued orders freezing certain property and assets of some of the parties involved in the Bridgemark case. As well, several civil claims have been filed against some of the parties for claims tied to the BCSC investigation and the allegations that arose in respect thereof.

Who is Blok?

Blok was a Vancouver mining company, a reporting issuer, that up until 2017, was mining in northern Canada and then announced an intention to get into clean energy and then pivoted a few months later, into Blockchain to develop a Blockchain for cannabis by acquiring a company called Greenstream. Blok represented to investors that Greenstream was the first in the world to identify that Blockchain could be used for cannabis. According to Blok’s public disclosure record, Greenstream had already developed smart contracts.

With respect to Bridgemark being a consultant pursuant to a consulting agreement, if there was one, the listing application of Blok completely omits to disclose that to investors and does not even disclose any material contracts, or any contracts for consulting services with Bridgemark at all. Continuing up to today, there is no material contract filed in respect of Bridgemark for consulting services at all. Blok either received faulty advice in respect of continuous disclosure obligations, failed to follow advice received or failed to obtain advice.

Blok recently announced it was shutting down the Greenstream smart contract cannabis tech.

Who is Cryptobloc? 

Cryptobloc started as tech company in the area of sensors.

Its early disclosure documents have footers that identify it as associated with, or having a listing completed by, Bacchus Law.

Like Blok, there is no material contract filed, or disclosure in respect of consulting services with Bridgemark.

In November 2017, it switched its business to Blockchain. It is not clear from its disclosure record, what precisely it does, or has done, in the Blockchain space. The Cryptobloc website home page evidences that its Blockchain customer-facing website is still not done since 2017 and is a work in progress.

It apparently has a fairly impressive client, however. On April 9, 2018, it issued a press release that, among other things, disclosed that the US based digital currency exchange Coinbase was its client and that it provides anti-money laundering (“AML“) services to it and, while unclear, possibly through a subsidiary entity.

Cryptobloc is under a management cease trade order and as a result, it is surprising that it could be providing AML solutions to Coinbase.

Coinbase has a New York State trust charter to operate as a financial institution, a BitLicence and 50 state MSB licences, as well as a FinCEN registration. Its as regulated as a digital currency exchange as it is possible to be in the US. Because of the trust charter, normally, the New York state bank regulator would require Coinbase to cease dealing with a service provider facing regulatory allegations until such allegations are resolved. 

You can read more here, and follow Glacier Media to stay up to date with the story.

Other parties named in the Bridgemark case are Aly Babu Mawji, Robert Lawrence, Tavistock Capital Corp., Jackson & Company Professional Corp, Anthony Jackson, Jarman Capital Inc. and Scott Jason Jarman.

Another Bitcoin exchange founder murdered after $23 million allegedly evaporates from exchange

By Christine Duhaime | July 28th, 2019

Exchange owner killed

The co-founder of a Bitcoin exchange called BitMarket, was found murdered in Poland, after the exchange closed, citing a lack of liquidity. Allegedly, over $23 million in customer funds is unaccounted for.

Tobiasz Niemiro was found with a bullet in his head in the woods a few hours from Warsaw. Although Polish, the exchange was registered in the Seychelles.

Growing number of Bitcoin murders

Niemiro is among a growing number of digital currency exchange founders who were murdered in the past two years.

For example:

  • 9 months ago, Heikki Bjrklund Paltto, a Bitcoin trader, was murdered in his home in Norway. He was 24 years old.
  • Over a year ago, Pavel Nyashin, was murdered in Russia. He was 23 years old.

The first Bitcoin exchange murder was in 2014 – then, the CEO of an early exchange, Autumn Radtke, was murdered in Singapore, although some believe her death was a suicide.

Bitcoin traders kidnapped & tortured

Others who work at exchanges or who trade on a self-employment basis, have been exposed to extreme violence as well. For example:

  • Three weeks ago in India, three Bitcoin traders were kidnapped, taken to a high rise in India and tortured for two weeks. The kidnappers sought 80 Bitcoin for their release.
  • Over a year ago, an ICO developer was kidnapped, beaten, mutilated and forced to transfer over $1M in Bitcoin to robbers in Moscow.

Bitcoin kidnap ransoms & murders

There is also a growing trend of using Bitcoin for ransom payments in kidnappings. For example:

  • The 12th richest man in Norway, Tom Hagen, alleged that on October 31, 2018, his wife was kidnapped by people demanding he pay $10M in Bitcoin for her release. He never paid because he said the police instructed him not to. The police believe she was killed.
  • The wife of a Brazilian exchange owner was also kidnapped in exchange for a Bitcoin ransom, which also wasn’t paid by her husband.
  • William Sean Creighton was kidnapped in Costa Rica last year. His family paid a $950,000 Bitcoin ransom for his release but despite paying, Creighton was never released and is believed to have been killed. His kidnappers wanted $5 million.
  • Earlier this year, a businessman in India was kidnapped and forced to pay $49 million in cash and Bitcoin to secure his release.
  • In Mexico, a lawyer was kidnapped for a Bitcoin ransom and while the family paid the ransom, the police located the kidnappers and got the Bitcoin ransom back.

The Bitcoin world is much more dangerous than banking – bank executives are rarely kidnapped, tortured or killed but despite this, unlike banks, exchanges still tend to lack security procedures for human assets and adequate insurance.

You can read more about the incidents of Bitcoin crimes afflicted on the people involved in the Bitcoin space here.

Ontario Securities Commission settles with Canadian ICO consultant, promoter and listing agent

By Christine Duhaime | July 28th, 2019

The Ontario Securities Commission (“OSC“) has entered into a settlement agreement with a Canadian company called CoinLaunch to settle claims that it engaged in the business of trading securities contrary to the Securities Act (Ontario) in respect of two ICOs. Articles about CoinLaunch stated that over $1,050,000,000 was generated on its ICO platforms (see below).

The two ICOs that were part of the settlement were BCZero and ECoreal. BCZero was an ICO issued for a truck racing team in the Czech Republic. ECoreal was an ICO issued to develop a resort in Portugal.

CoinLaunch offered ICO consulting services that included writing white papers, soliciting investments, going on fund raising roadshows, getting listed on digital currency exchanges and fulfilling anti-money laundering law requirements. CoinLaunch was not registered to be in the business of trading of securities and was not exempt from registration.

The parties agreed that the Howey Test applied to the two ICOs under Ontario law, which may be the most important take-away from the settlement agreement for future actions by the OSC.

Pursuant to the settlement agreement, CoinLaunch agreed to pay a fine of $30,000 plus costs, to disgorge $12,000 and to destroy access to ICO coins in its possession. It is prohibited from trading in securities for 5 years and its CEO, Reuven Cohen, agreed not to act for any company engaged in the business of trading in securities where such company is not authorized to do so.

The OSC took into account an argument by CoinLaunch that it was unfamiliar with the law as a mitigating factor. Every legal and natural person in Canada is deemed to know the law of Canada and it is not a defence to argue lack of knowledge of the law in the criminal, civil or regulatory context. Recognizing that, the OSC noted that such arguments by ICO players in the future may be given little weight.

The settlement agreement also puts ICO players on notice generally and the OSC warned that firms that ignore the Securities Act can expect to face worse consequences.

CoinLaunch did not shy away from describing itself as in the business of promoting, offering, selling and listing securities – on this site, it described itself as a platform to create and sell ICOs “safely and securely” with know-how to walk any company through the sale of ICOs from pre-sale, sale to the public and on the secondary markets.

And here, its CEO describes how one could use the platform and services to avoid, among others, lawyers, which were, he stated, “expensive.” CoinLaunch was described as a company that “specializes in …legal.” That seems suggestive of the practice of law and to the extent it is, no one associated with CoinLaunch appears to have been licensed under the Law Society Act to provide legal services, or hold themselves out as authorized to offer legal services.

According to a representation made in an interview with Tech Crunch, over $1 billion was generated using CoinLaunch. CoinLaunch launched another service called Fraction/al, which separate and apart from its CoinLaunch service and funds raised on that platform, “helped raise over $50 million for clients” in a two month period in the summer of 2018.

The settlement agreement does not address what happened to the $1,050,000,000 or how members of the public that used their platforms and who made payments of $1,050,000,000, as alleged, can claim the right of rescission in respect of the sale of securities sold contrary to the Securities Act. CoinLaunch claimed it had users from over 60 countries on its platform. It is also possible that the figures were greatly exaggerated or untrue, and were made to drive sales as mere legal puffery, and that no members of the public actually paid those sums.

EU Commission report finds bank negligence over anti-money laundering compliance

By Christine Duhaime | July 26th, 2019

A new report released by the EU Commission that looked at cases of alleged money laundering made several findings about some banks operating in the EU, including that they were negligent when it came to anti-money laundering (“AML“) law compliance in respect of the cases it looked at.

The EU Report found that shortcomings identified in the cases it looked at of alleged money laundering by banks were driven by negligence. It also found that some banks made decisions to favour lucrative business lines at the expense of AML compliance. It also found that banks take too long to address AML deficiencies, and some banks have risky practices where they do not increase AML compliance to accommodate more risky lines of business. It also found that there were governance flaws at banks that impacted AML compliance.

The Report suggested that bank supervisory agencies be held accountable for their actions to ensure banks comply with the law.

The Report is called “Report from the Commission to the European Parliament and the Council on the Assessment of Recent Alleged Money Laundering Cases.”

US Treasury files civil claim against foreign Bitcoin exchange and its owner / officer to enforce penalties of $100M for AML failures

By Christine Duhaime | July 25th, 2019

The US Attorney for the Northern District of California, on behalf of the US Treasury, has filed a civil complaint against the Bitcoin exchange known as BTC-e and one of its alleged owners / officers, Alexander Vinnik, to enforce over $100 million in monetary penalties for a series of anti-money laundering law violations.

BTC-e was incorporated in Cyprus and/or the Seychelles and operated in several countries offering Bitcoin exchange services, including to US residents online. Vinnik is currently incarcerated in Greece, fighting extradition. Both defendants were indicted in January 2017 in the US in connection with AML violations.

In early 2017, FinCEN determined that BTC-e was a MSB because it provided money transmission services in the US though its exchange. It sought no AML-related information from those completing financial transactions at any time. It processed transactions in the US of over $296,000,000.

As an MSB, it was required, inter alia, to register with FinCEN, to register in the state in which it provided services, to have an AML program in place, to train its employees, to have a designated AML officer, to file SARs and to create and maintain records related to financial transactions. FinCEN assessed monetary penalties against both defendants in 2017 and this litigation seeks to enforce those penalties.

According to the complaint, Bitcoin buyers, sellers or traders sent funds to front companies of BTC-e and such funds were converted to digital currencies. The exchange was not allegedly, a normal exchange because a “significant portion of BTC-e’s business was derived from suspected criminal activity.”

With respect to Vinnik, the complaint alleges that he had control over some of the exchange’s wallets used to process transactions (the trust account wallets). Vinnik allegedly sent emails confirming that he owned BTC-e. On behalf of the Bitcoin exchange, Vinnik is alleged to have had control over trust account wallets that took in funds stolen from Mt. Gox and to have transferred the cash-out funds to the exchange’s bank accounts and then to bank accounts associated with him.

The importance of this allegation is that Vinnik had visibility over digital currencies moving into the exchange (by virtue of control over the pooled trust account wallets) and out of the exchange as they hit the financial system (by virtue of control over the bank accounts of the Bitcoin exchange).

For a unique view, you can read how Vinnik’s wife believes that the US wants him extradited for his alleged Bitcoin intellect. She also reasons that if he can be prosecuted over BTC-e, so too can manufacturers of frying pans because in Russia she says, women hit their husbands with frying pans. Vinnik believes he is being sought by the US because he believes he is a singular threat to US banks.

The press release from the DoJ is here.

York Regional & Italian police take down alleged major ‘Ndrangheta players and seize over $35 million

By Christine Duhaime | July 21st, 2019

Calabria and Toronto

York Regional Police, north of Toronto, Canada, made a major money laundering bust last week against the ‘Ndrangheta, arresting several of its alleged members including its alleged leader, Angelo Figliomeni.

Figliomeni is charged with money laundering, directing a criminal organization and fraud. Another eight alleged associates of Figliomeni were arrested on various charges including loan sharking and illegal gambling.

York Regional Police executed 48 warrants and seized $35 million in alleged proceeds of crime including 23 luxury cars, including 5 Ferraris, a $7,000 bottle of scotch, 27 houses and $2 million in cash and jewellery. They also seized gaming machines and ATMs. Police also executed warrants against 11 illegal gambling venues allegedly controlled by the ‘Ndrangheta.

Prior to his arrest, the police allege that Figliomeni and his associates were laundering proceeds of crime at Ontario Lottery & Gaming Corporation casinos around Toronto and through real estate companies, accountants and financial services companies. Police believe they laundered $70 million in the last few years in Toronto.

Police in Italy made simultaneous arrests of ‘Ndrangheta from Siderno, Calabria, while York Regional Police made their arrests.

The Italian police describe the links and connections between the ‘Ndrangheta families in Calabria and those in Toronto as a “criminal Blockchain.” It’s a fitting description on some level but the ‘Ndrangheta are anything but transparent or easily traceable.

About the ‘Ndrangheta

The ‘Ndrangheta are a different breed of transnational criminal organization. They are supply chain management experts which allows them to control much of the world’s cocaine transportation and its supply chain into various countries, but they typically do not manufacture drugs or deal at the street level. They control large ports in the EU, which allows them to import cocaine in bulk.

In the EU and in third world countries they are known to infiltrate, bribe and extort law enforcement and other legal gate-keepers for access and to avoid prosecution. A recent report from an Italian Court of Appeal found that the ‘Ndrangheta has infiltrated all parts of the economy and government in Italy.

They are extremely secretive and usually only allow entry to those of ‘Ndrangheta blood, which means those whose family originate from Calabria.

Italian police say that much of Calabria is ‘Ndrangheta and anyone from that region immigrating to other countries is in furtherance of the expansion of the family criminal enterprise (the family being the ‘Ndrangheta).

The ‘Ndrangheta are wealthy – their revenues are estimated to be $53 billion per year.

Although they have been around for 150 years in Italy, it was the US and not Italy that took the first step towards stopping the ‘Ndrangheta from a money laundering legal perspective. In 2008, the U.S. Department of the Treasury added the ‘Ndrangheta to the Office of Foreign Assets Control Specially Designated Nationals list, which prohibits dealing with their cash or property.

Two years later, in March 2010, Italy designated the ‘Ndrangheta as a mafia organization for the purposes of Italian law.

The ‘Ndrangheta take pains to appear to be law abiding members of society and while they are secretive, so too are their operations. They have secret members (wealthy professionals) who launder their proceeds of crime and they operate through corporate entities so that the proceeds of crime flow through company bank accounts.

To join the ‘Ndrangheta, members must agree to always carry these seven things with them:

  1. Humility to be humble;
  2. Loyalty to protect each other;
  3. Scripts and procedures to converse with fellow society members;
  4. False scripts and procedures to speak with law enforcement and unworthy people;
  5. A knife to protect the society;
  6. A mirror to look behind your back at all times; and
  7. A razor blade to cut away unworthy people.

If Angelo Figliomeni is ‘Ndrangheta, as alleged, he may have forgotten rule #6 because he wasn’t watching behind him to notice that he was under investigation for 18 months prior to his arrest.

An ‘Ndrangheta daughter

Another member of the Figliomeni clan, this time a woman, Jole Figliomeni, left Calabria, Italy for Abidjan, Ivory Coast, which is a major cocaine import hub.

She allegedly left Italy because she had an affair with the husband of the sister of Giuseppe Commisso.

The Figliomeni and Commisso families are two of the leading ‘Ndrangheta families, according to the Italian anti-mafia police.